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While I’d love to gush about the amazing articles I edited and posted this week, what really got under my skin was Kamala Harris’s advice on how to pay for college.
Nothing screams “I am a corporate shill” quite like advising parents to take out home equity loans for their children’s college education. Yet, that’s exactly what Vice President—and now presidential candidate—Harris proposed at a Milwaukee conference in May, where she was supposed to discuss ways to “help people of color deal with debt” and build generational wealth.
Every financial expert I know is against this idea.
George Kamel, a Dave Ramsey personality, stated the following on the Chinese agitprop social media app, TikTok: “Parents: HELOCs have a variable interest rate, which means these loans can increase at any time. If you miss a payment and default on a HELOC, the bank could take your house”—good luck at building generational wealth without a house.
I’d dismiss this advice as idiocy if Harris didn’t stand to gain from HELOC defaults.
Harris and her husband, Douglas Emhoff, hold between $2.9 million and $6.6 million in investments, including a family trust with undisclosed assets. Most notable, however, is the couple’s stake in BlackRock, which, as of July 31, 2023, owns part of Blackstone. Blackstone owns more than 6 million single-family homes in the U.S. It’s the company we’ve all heard of that’s been buying families out of the opportunity to own homes. Undoubtedly, they stand to profit from foreclosures resulting from home equity loan defaults. It’s a classic tale: buy foreclosed homes cheap, rent them out at high rates, and boost stock value—Harris’s stock value.
If not for personal gain, I don’t know why the corporate-connected Vice President would tell people aiming to build generational wealth to take out HELOCs to pay for their children’s college education, but the bottom line is: don’t do it.
Here’s some better advice: follow Kamel’s tip and treat scholarship hunting like a part-time job. And, as I pointed out in my May article on personal finance, teach financial literacy! Parents, again, don’t take Kamala’s bad advice; it’s a recipe for losing your home and upending generational wealth. Students, take AP courses and pass the tests, participate in dual enrollment programs, get savvy with budgets, make smart investments, choose a more affordable school, and for God’s sake, don’t let your folks risk their home—potentially your inheritance—just so you can attend a campus with a lazy river.
Photo of Harris by Gage Skidmore — Flickr & respres — Wikimedia Commons & Edited By Jared Gould
Considering the source of this proposal, I’m not surprised. Nothing new here. HELOCs have been used to pay for college tuition for decades. It was foolish back then; it is foolish now.